In Brief
Delhi Development Authority (DDA) leased a commercial plot to Jindal Strips Limited, which later demerged under a court-approved scheme, transferring the property to Jindal Stainless Limited—a sister company with common directors and shareholders. DDA demanded 50% unearned increase (UEI) on the property's market value. The High Court Division Bench quashed the demand, treating the demerger as a mere business reorganization attracting no UEI. The Supreme Court allowed DDA's appeal, holding that the demerger constituted a transfer within the lease deed's scope. Although transfer occurred between group entities without consideration, the lease deed clause 6(a) and the DDA's policy clause 2(d) expressly render UEI payable in such transfers. The group status and absence of consideration do not exempt liability from this contractual obligation.
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